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Unlike investing in share market where you can lose huge amounts of amount of money, trading in foreign currencies with Forex is more secure and less risky. This is because while trading in foreign currencies, you invest low amount and can expect to gain huge amounts. If you lose, you just lose the low money you invested and not the money you expected to gain. Again, if you make a profit, then the profit comprises of the money you expected to gain and not just some mere percentage of your investment. Perhaps this is why Forex rightly claims that by trading in foreign currencies and their expected mobility you can gain unlimited with low investment. As for the simplicity, it must be noted that all the dealings are made online. This has two advantages. One is that there is no direct purchase and selling involved unlike the shares that you actually purchase. The other advantage is that the investors can invest online using their credit or debit cards and can keep track on their investment and latest values of the currencies from anywhere and everywhere.
Investment should not Exceed the Risk Losing Value
Just like any other markets the prices or rather the values of the foreign currencies in Forex market rise and fall. Unlike shares, their mobility and fluctuations are highly unpredictable and can fluctuate several times a day. When you invest in a foreign currency, you must be aware that the probabilities of earning and losing are equal. Hence it is advised by the Forex team that you should never invest more than you may risk to lose as in case you lose, you lose all your money if you had invested that money. Hence trading on such a platform means that you must always buy with limited and small investment but sell with a high price.
Earning from Base Currency
If you are thinking that you must invest in the same currency that you are buying or will earn profit in the same currency that you are selling, then you are completely wrong. Remember that the deals and the trading are virtual. By virtual it does not mean that the investments and the profit and the mobility of the foreign currencies are unreal. By virtual it means that the foreign currencies being bought or sold are just parts of the deal whose mobility is too tracked. You invest and earn in your own base currency.
The Deals Expire within a Day
As explained above, the values of the foreign currencies are never stable. The values in Forex fluctuate several times a day. Hence it can never be easily predicted what would be the value of a particular currency at a particular time. Keeping this in mind, the Forex has limited the time span of each deal to twenty four hours, which is enough considering the high unpredictability. However investors are given the provision to take the proceedings of one deal to the next day, but there again there Is a limited time after which the values become invalid.
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